Configurations for Achieving Organizational Ambidexterity with Digitization

Due to digitization, new mechanisms have emerged for achieving organizational ambidexterity, defined as the ability to pursue both efficiency and flexibility while balancing exploitation and exploration. This study investigates the role of digitization in achieving organizational structural ambidexterity by undertaking both exploitation and exploration simultaneously. Given the complex interdependencies between digitization and multiple intrafirm and interfirm factors in practice, this study adopts a configurational theory perspective. We posit that ambidexterity is better explained as an outcome of aligning digitization with several intrafirm and interfirm factors, rather than of any individual factors in isolation. We empirically derive configurations for achieving ambidexterity by applying fuzzy-set qualitative comparative analysis to 1,325 Canadian firms that invested in new information technology system implementation. The results reveal the mechanisms in which digitization plays a multifaceted role in achieving ambidexterity. Notably, the mechanisms differ among intrafirm-oriented configurations and interfirm strategic alliance configurations, and among large firms and small firms. In the intrafirm solution, digitization and centralization are essential for achieving ambidexterity, with other factors being peripheral; however, in the interfirm solution, digitization plays a peripheral, and even a counterproductive role, in achieving ambidexterity. Particularly, intrafirm collaboration is a necessary condition in both the intrafirm and interfirm solutions for achieving ambidexterity. Interestingly, the results also suggest that small firms seeking ambidexterity require a high level of digitization only while pursuing an intrafirm (but not for an interfirm) solution, whereas large firms require a high level of digitization for both intrafirm and interfirm solutions. New insights and implications for theory and practice for achieving organizational ambidexterity with digitization are discussed.